The Children’s Health Insurance Program is a cheap, successful program that provides health care coverage to 9 million low- and middle-income children. Its budget expired 110 days ago — and Republicans in Congress have done next to nothing about it.
Multiple states have sent out letters warning families that their kids’ health insurance could end on January 31. Congress did pass a temporary bill that it expected to extend CHIP’s life span until March — but it turns out they got the math wrong, and states may run out of funding as early as January 19.
In the meantime, Congress managed to pass a tax bill along party lines that will give about $1.5 trillion in tax breaks to corporations and the very wealthy. How did they pay for it? They didn’t. The cost is piled onto the deficit.
Democrats and Republicans agreed last year, in principle, on a plan to reauthorize CHIP’s funding for five years. But Republicans proposed a series of deeply partisan spending cuts to cover the costs of extending CHIP — such as slashing Obamacare programs and Medicare — that have stalled negotiations.
Last week, there was a brief moment when it looked like the problem could be solved: the Congressional Budget Office put out a report estimating that it would actually save the federal government money to extend CHIP’s budget for another decade (more on why below).
Still, a week later, CHIP’s budget remains unfunded. Children’s health insurance has become a bargaining chip for Republicans. The goal seems to be getting Democrats to sign onto a short-term spending bill — not actually getting health insurance for low-income kids.
States are having very real discussions about the possibility that the 20-year-old program will shut down. If it does, the kids on CHIP don’t have a safety net. The CHIP program is their safety net. Time is running out, and Congress is doing nothing.
Republicans have displayed stunning hypocrisy
Republicans in Congress have said that extending CHIP costs too much. But right now, that excuse doesn’t hold much water.
“The reason CHIP is having trouble [passing] is because we don’t have money anymore,” Sen. Orrin Hatch (R-UT), who chairs the Senate Finance Committee, said in early December. “We just add more and more spending and more and more spending, and you can look at the rest of the bill for the more and more spending.”
At the time, extending the CHIP program was estimated to cost $8.3 billion. And just days after Hatch said this, Republicans passed tax cuts worth $1.5 trillion that aren’t paid for at all. Instead, they piled the cost onto the federal deficit by more than a trillion dollars. The price of extending CHIP, at the time of those remarks, was 5.6 percent of the cost of the tax bill.
Weeks after these remarks, the Congressional Budget Office issued a surprising report: it estimated that the federal government would actually save $6 billion if it extended CHIP for another decade.
The reasons for this are a bit wonky, but for those who want the details: The new CBO report takes into account the repeal of the individual mandate in the tax bill. That is expected to significantly raise premiums in the Obamacare marketplace. Since some CHIP children are expected to transfer to the marketplace for coverage should their plans disappear, CBO expects the federal government would have to spend significantly more to subsidize those now-higher premiums.
“Extending funding for CHIP for 10 years yields net savings to the federal government because the federal costs of the alternatives to providing coverage through CHIP (primarily Medicaid, subsidized coverage in the marketplaces, and employment-based insurance) are larger than the costs of providing coverage through CHIP during that period,” the nonpartisan budget agency writes.
CHIP was always a relatively cheap program for the federal government. But now it literally costs the government money to not extend the program. A 10-year extension of CHIP requires no pay-fors — in fact, those $6 billion in savings could help pay for something else.
Costs, clearly, are not the reason that Congress has not extended the CHIP. If that really was the obstacle, the CBO report would have cleared the way for legislation to pass quickly — to bring peace of mind to the families that rely on the CHIP program.
Instead, what has become clear over the past week is that costs aren’t the real obstacle. Republicans seem to want to hold onto CHIP as a way to entice Democrats into supporting a short-term government funding bill that would avert a shutdown later this week.
This isn’t about kids’ health insurance anymore. It’s about politics.
CHIP has cut kids’ uninsured rate in half over the past two decades
The CHIP program has done what it’s supposed to do since it began 20 years ago: It has dramatically reduced the number of kids who go without health insurance and increased their access to medical services, all at a relatively low price.
Before Congress created CHIP, 14 percent of American children simply went without health insurance. Two decades ago, in 1997, Congress decided this was unacceptable. Republicans and Democrats teamed up to create the program and provide coverage to low- and middle-income children.
The program, quite simply, worked. States quickly saw results. One study of the impact of CHIP in New York “showed that pre-existing racial/ethnic disparities in access, unmet need, and continuity of care among children were virtually eliminated during the year following their enrollment in CHIP,” the Kaiser Family Foundation notes.
Nationally, kids’ uninsured rate has fallen in half since Congress created CHIP (and further since the Affordable Care Act took effect). This has all happened while uninsured rates for adults has remained much higher.
Kids on CHIP are more likely to go to the dentist than those who are uninsured. They are less likely to have unmet needs for necessary medical services, like getting prescription eyeglasses or mental health counseling.
One recent government evaluation of CHIP found that kids on CHIP tend to have access to care that is roughly equivalent to that of kids who are on private, employer-sponsored coverage through their parents. And “compared to uninsured children, children enrolled in Medicaid or CHIP have substantially better access to health care services,” the same report found.
But now all of this progress is at risk. CHIP programs have so far subsisted on money left over from their last round of budgeting five years ago. That won’t last.
Congress can fix this problem. If Republicans and Democrats can get together like they did in 1997, they could save the government money, extend CHIP’s budget for another decade, and take the program out of limbo. But up until now, they’ve shown little interest in doing so — and millions of Americans are left anxious as a result.